Historical Tax Data and Tax Cuts

The history of income tax rates through the 20th century puts a lie to the claim that Reagan and Bush tax cuts benefit the middle class. Instead it shows that most of the tax cuts have gone to the highest incomes, whereas the middle and lower classes have not sizably benefited from these cuts.

I am including a link to historical tax rate data at http://www.taxfoundation.org/publications/show/151.html

In 1926, in the middle of "roaring 20's," the tax on inflation-adjusted incomes of $0 to $50,707 a year was 1.5%; on $80,000 a year, 3%; and climbed through higher incomes to top off at 25% for incomes $1,267,000 or above in inflation-adjusted terms.

In 1946, under Truman, the tax on inflation-adjusted income of $20,000 a year was 20%; on $50,000 a year, 26%; on $80,000 a year, 30%; and climbed through higher incomes to top off at 91% for incomes of over $2,300,000 a year, in inflation-adjusted terms.

In 1963, under Kennedy, the tax on inflation-adjusted income of $20,000 a year was 20%; on $50,000 a year, 22%; on $80,000 a year, 26%; and climbed through higher incomes to top off at 91% for incomes of over $2,900,000 a year, in inflation-adjusted terms.

In 1985, under Reagan, the tax on $20,000 a year was 14%; on $50,000 a year, 22%; on $80,000 a year, 33%; and topped off at 50% on incomes $352,000 a year or above.

In 1996, under Clinton, the tax on $20,000 a year was 15%; on $50,000 a year, 15%; on $80,000 a year, 28%; and topped off at $39.6% for incomes $377,000 a year or above.

In 2006, under Bush Jr., the tax on $20,000 a year was 10%; on $50,000 a year, 15%; on $80,000 a year, 25%; and topped off at 35% for incomes $374,000 a year or above.

What this means in practical terms is that the taxes on lower and middle incomes aren't much less than they were in 1940s. The real tax reduction has been found in highest incomes. The bulk of the people who howl about high taxes have not benefited from the tax cuts. The bulk of the gain has been found in millionaires; and Obama is right to say that asking them to contribute their fair share "is not class warfare; it is math."

It is useful that people have these figures. They speak louder than most radio and TV shouters and have a lot to offer in way of correcting these people with reason and fact.